Ford 2013 Annual Report Download - page 120

118 Ford Motor Company | 2013 Annual Report
FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 15. DEBT AND COMMITMENTS (Continued)
EIB Credit Facilities
On December 21, 2009, Ford Romania, our operating subsidiary in Romania, entered into a credit facility for an
aggregate amount of €400 million (equivalent to $551 million at December 31, 2013) with the EIB (the “EIB Romania
Facility”), and on July 12, 2010, Ford Motor Company Limited, our operating subsidiary in the United Kingdom (“Ford of
Britain”), entered into a credit facility for an aggregate amount of £450 million (equivalent to $744 million at
December 31, 2013) with the EIB (the “EIB United Kingdom Facility”). The facilities were fully drawn at
December 31, 2013. Loans under the EIB Romania Facility and the EIB United Kingdom Facility bear interest at a fixed
rate of 4.44% and 4% per annum, respectively. Proceeds of loans drawn under the EIB Romania Facility have been used
to fund upgrades to a vehicle plant in Romania, and proceeds of loans drawn under the EIB United Kingdom Facility have
been used to fund costs for the research and development of fuel-efficient engines and commercial vehicles with lower
emissions, and upgrades to an engine manufacturing plant in the United Kingdom. The loans under each facility are five-
year, non-amortizing loans secured by respective guarantees from the governments of Romania and the United Kingdom
for approximately 80% and from us for approximately 20% of the outstanding principal amounts. Ford Romania and Ford
of Britain have each pledged fixed assets, receivables, and/or inventory to the governments of Romania and the United
Kingdom as collateral, and we have pledged 50% of the shares of Ford Romania to the government of Romania and
guaranteed Ford of Britain’s obligations to the government of the United Kingdom.
Automotive Credit Facilities
At December 31, 2013, lenders under our revolving credit facility had commitments totaling $10.7 billion, with a
November 30, 2017 maturity date, and commitments totaling $50 million with a November 30, 2015 maturity date. The
revolving credit facility is unsecured and free of material adverse change clauses, restrictive financial covenants (for
example, debt-to-equity limitations and minimum net worth requirements), and credit rating triggers that could limit our
ability to obtain funding. The revolving credit facility contains a liquidity covenant that requires us to maintain a minimum
of $4 billion in aggregate of domestic cash, cash equivalents, and loaned and marketable securities and/or availability
under the revolving credit facility. If our senior, unsecured, long-term debt does not maintain at least two investment grade
ratings from Fitch, Moody’s, and S&P, the guarantees of certain subsidiaries will be required.
At December 31, 2013, the utilized portion of the revolving credit facility was $83 million, representing amounts
utilized as letters of credit.
At December 31, 2013, we had $802 million of local credit facilities to foreign Automotive affiliates, of which
$99 million has been utilized. Of the $802 million of committed credit facilities, $487 million expires in 2014, $277 million
expires in 2015, and $38 million thereafter.
Financial Services Sector
Asset-Backed Debt
Ford Credit engages in securitization transactions to fund operations and to maintain liquidity. Ford Credit’s
securitization transactions are recorded as asset-backed debt and the associated assets are not de-recognized and
continue to be included on our financial statements.
The finance receivables and cash flows related to operating leases that have been included in securitization
transactions are only available for payment of the debt and other obligations issued or arising in the securitization
transactions. They are not available to pay Ford Credit’s other obligations or the claims of its other creditors. Ford Credit
does, however, hold the right to the excess cash flows not needed to pay the debt and other obligations issued or arising
in each of the securitization transactions. The debt is the obligation of Ford Credit’s consolidated securitization entities
and not Ford Credit’s legal obligation or that of its other subsidiaries.